This Emerging Issues Analysis
examines how federal law affects medical malpractice issues and hospital and
health care provider bankruptcies. Specifically, the article discusses (i) how 28
U.S.C. § 157(b)(2)(B) [an annotated version of this statute is available to lexis.com
subscribers], which states that a bankruptcy court may not hear, liquidate
or estimate contingent or unliquidated personal injury tort or wrongful death
claims for the purposes of distribution, affects the bankruptcy process; (ii)
the Courts' interpretation of "personal injury claims;" (iii) Tort
Claims and Mass Tort Implications and Protocols; (iv) mediation procedures; and
(v) self insurance.
How 28 U.S.C. § 157(b)(2)(B) affects the Bankruptcy Process
The bankruptcy court's ability to estimate claims in the context of a hospital
bankruptcy is made more complicated by virtue of other federal law which
affects the bankruptcy process. Specifically, under 28 U.S.C. § 157, a
bankruptcy court may not hear, liquidate or estimate contingent or unliquidated
personal injury tort or wrongful death claims for the purposes of distribution.
Section 157(b)(2)(B) provides that core proceedings arising under title 11
include, but are not limited to:
allowance or disallowance of claims against the estate or exemptions from
property of the estate, and estimation of claims or interests for the purposes
of confirming a plan under chapter 11, 12, or 13 of title 11 but not the
liquidation or estimation of contingent or unliquidated personal injury tort or
wrongful death claims against the estate for purposes of distribution in a case
under title 11.
28 U.S.C. 157(b)(5)
Further, section 157(b)(5) provides that "[t]he district court shall order
that personal injury tort and wrongful death claims shall be tried in the district
court in which the bankruptcy case is pending, or in the district court in the
district in which the claim arose, as determined by the district court in which
the bankruptcy case is pending."
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